The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a US federal law, enacted on 27th July, 2017 and came into effect from January 2018, that has imposed sanctions on Iran, North Korea and Russia. This act prevents trade partners of the United States in entering into bilateral contracts with these three nations. The Act empowers the US President to impose at least five of the 12 listed sanctions on persons engaged in a significant transaction with Russian defence and intelligence sectors. Its ultimate goal is to prevent revenue from flowing to the Russian Government. The Countering America’s Adversaries through Sanctions Act (CAATSA), aims at taking punitive measures against Russia, Iran, and North Korea. The Act primarily deals with sanctions on the Russian oil and gas industry, defenceand security sector, and financial institutions, in the backdrop of its military intervention in Ukraine and its alleged meddling in the 2016 US presidential elections.

Background of CAATSA :

The Countering America’s Adversaries Through Sanctions Act came against the backdrop of three events that would have serious implications regarding geopolitics. They are as follows:
• Iran’s Nuclear Missiles Program: The United States Government believed that any progress in Iran’s nuclear missile program would further destabilize the Middle-East as Iran has repeatedly made threats against Israel, a key NATO and United States ally. The CAATSA gives authority to the President of the United States to impose sanctions against any party involved in the sale and transfer of military technology to Iran.
• Curbing Russian influence: The Russian annexation of Crimea in 2014 and allegations of interventions in the US polls of 2016 was the catalyst for the CAATSA against Russia. Under the act sanctions can be imposed on Russia should the state or private individuals be found involved in activities such as cybersecurity, crude oil projects,  financial institutions, corruption,  human rights abuses etc.
• North Korea and weapons of mass destruction: North Korea has a nuclear weapons military program and as of 2020 it’s estimated missile arsenal includes 30-40 warheads with enough fissile materials to produce 6-7 missiles per year. North Korea has made repeated threats against its South Korea repeatedly and also against the United States.

Types of Sanctions:
The CAATSA contains 12 types of sanctions. There areonly two sanctions that may impact either India-Russia relations or India-US relations.
• Prohibition of Banking transactions: It is likely to have an impact on India-Russia relations.This would mean difficulties for India in making payments in US Dollars to Russia for the purchase of the S-400 systems.
• Export Sanction: The second sanction will have greater consequences for India-US relations. It has the potential to completely derail the India-US Strategic and Defence partnership, as it will deny the license for, and export of, any items controlled by the US.

India’s Concerns :

Seventy per cent of Indian military hardware is Russian in origin. While the US has become its second-largest defence supplier, mainly of aircraft and artillery, India still relies heavily on Russian equipment, such as submarines and missiles that the US has been unwilling to provide. The USA President was given the authority in 2018 to waive CAATSA sanctions on a case by case basis. A waiver of such CAATSA for India has been under consideration since the law had come into force. In fact, India was threatened with sanctions when it decided to buy the S-400 missile launchers from Russia and buy crude oil from Iran. What is also worrying for India is the example of Turkey who, despite being a key NATO ally, was expelled from the US F-35 fighter jet programme when it purchased S-400 missile systems from Russia. Yet India went ahead with the S-400 deal in 2018 with no negative reaction from the United States government. The delivery of the S-400s is expected to finish by 2025. However, the USA has repeatedly stated that India should not assume it will get a waiver. Now India could also face USA sanctions for purchasing the S-400 Triumf missile defense system from Russia under the CAATSA. If implemented stringently, CAATSA would impact Indian defence procurement from Russia. Lately, the United States Government has stated that although a waiver is not possible at this time, a blanket application of sanctions against India for its defence contracts with Russia is also not being considered. India stopped importing oil from Iran in mid-2019 following sanctions on the Persian Gulf nation by the Trump administration.Iran in 2017-18 was its third-largest supplier after Iraq and Saudi Arabia and met about 10% of total needs.Iran getting closer to China is also a serious concern for India.

India needs to balance its relation with both Russia and USA, so that its national interest is not compromised. Russia always saw India as a balancer that’s why Russia facilitated India’s inclusion into Shanghai Cooperation Organisation (SCO) and formation of Russia-India-China (RIC) grouping.The defence procurement for India has become significant amid deadly clashes with China on Line of Actual Control (LAC). Further, Russia is an all weather defence partner of India.India today is in a unique position to have a favourable relation with all great powers.It needs to develop closer ties with the United States, which could balance any moves towards a strategic partnership between China and Russia. Thus, India must leverage this position to help in building a peaceful world order.

Sources : The Hindu and Drishti IAS